‘The biggest upgrade to workers’ rights in a generation’

The Employment Rights Bill (ERB) originated in the House of Commons and received its second reading in the House of Lords on 10th April 2025. The Bill is set to introduce 28 significant reforms with the majority anticipated to take effect from 2026. It makes provision to amend the law relating to employment rights and significantly changing many existing rights by removing the 2-year qualifying period. The key proposals in the ERB include employees gaining the right not to be unfairly dismissed from day one and will no longer need 2 years’ service to qualify.

There will be new restrictions on ‘fire and rehire’ to severely restrict employers’ ability to use this to vary an employee’s terms and conditions, and would result in an automatic unfair dismissal if the employee is dismissed for not agreeing to amended terms. There are multiple exceptions an employer can look to prove, but there is a high bar for them to meet.

The ERB sets out various reforms including bringing an end to exploitative zero-hour contracts by introducing rights to guaranteed hours reflecting the number of hours regularly worked. Notice of shifts changing and payments for short-notice cancellation will also be implemented. Specific details about how this will operate in practice will be subject to consultation and secondary legislation.

Currently there is a time limit of 3 months from the act complained of to bring any claim in the Employment Tribunal (e.g unfair dismissal and discrimination). A key proposal of the ERB is to extend this to 6 months, providing employees with significantly more time to bring an employment claim and allow both parties greater opportunity to explore early resolution.

Other proposed changes include:

• Flexible working will be made the default where feasible. Any refusal of a flexible working request must be reasonable and be explained in writing.
• Introducing new regulations to cover dismissals during pregnancy, maternity leave and for six months following a return to work.
• Lower paid employees will have access to a safety net of sick pay at a rate of either 80% or the flat rate, whichever is lower. This will be available from day one of the sickness.
• Employers will need to keep records demonstrating their compliance with holiday entitlement.
• Strengthening collective redundancy rights where employers propose 20 or more redundancies at one time.
• Improved access to paternity and unpaid parental leave by giving day one rights.
• Day one right to bereavement leave.
• Extending the legal duty for employers to take steps to stop sexual harassment including by third parties. Employers will be required to take ‘all reasonable steps’ to prevent harassment.
• Improve the provisions about treatment of workers involved in the supply of services under certain public contracts.

Amendments continue to be put forward as the ERB progresses through Parliament. The next step is for the Bill to pass through the House of Lords with discussions of an anticipated date it will come into force. Follow along with us for updates on the final stages of the Bill and its implementation.

We can provide detailed legal advice on how the upcoming changes could affect you as an employer/employee.
For all employment law advice and representation contact us at [email protected]